Note: This is not really an article about selling your business!
If you’ve ever sold a house, then this concept will likely come easy. When selling a home, your first order of business is almost certainly to get things into tip-top shape. You go to work fixing the loose railing that you’ve lived with for years, replacing burnt-out light bulbs, and putting a new coat of paint on dingy walls. The yard gets some much-needed TLC and you do everything you can to make the property appealing to prospective buyers. It’s human nature. We are often willing to live with all sorts of deficiencies when it is ‘just’ our home, but when we are to attach a price to it, we’re motivated to get it “sell ready.” Often this means dealing with things to which we have turned a blind eye for years.
Now, take that same mindset and apply it to your business. If you knew you had a prospective buyer coming to analyze your business before making an offer to purchase it, you’d ensure it is in the healthiest condition possible. You’d implement programs to eradicate waste and promote quality. Processes would get documented and employee manuals updated. Activities that do not further the business towards its goals get set aside, you gain focus, and your business becomes a well-oiled machine. All this in an effort to maximize it’s selling value.
Selling price aside, there is a real, tangible benefit to an organization having gone through this process. And, you don’t actually need to put your business up for sale to initiate these improvements. Starting tomorrow, assume that you will receive an offer to purchase your business in 90 days. Mark that date on your calendar – it’s now your near-term deadline.
Next, start looking at your business through the lens of a perspective buyer and identify everything that is eroding away at the value. Look deeper than what can be seen on the surface and identify weaknesses in your process, documentation, training, marketing, reputation, supply chain, etc. Engage your staff and recruit them into this process. Your employees have a unique view of what is working and what needs some attention. This can be done several ways, ranging from an anonyms staff survey, to one-on-one interviews. Just be prepared that you won’t always like what you hear, but you’ll be better for it.
Make a list of these areas for improvement – or just call them what they are: deficiencies – while being as ruthless as the prospective buyer is sure to be. Prioritize with the easiest to fix issues at the top. Dealing with the low-hanging fruit first will give you some quick wins and the momentum to move through the other, more challenging items on the list.
By re-framing your perspective from business owner to buyer, you will uncover a whole new view of your organization. Processes that are ineffective and areas of under-performance – things which may have once been tolerated, or even ignored – will stand out like beacons of opportunity. Over time, the “for sale” version of your business will undoubtedly perform better than the previous “status quo” version.
After the 90 days, spend some time evaluating your progress. Assign an estimated value to each item on the list and tally it up to determine the overall worth of doing this exercise – it may prove to be your most valuable investment of time this year.
This exercise can be repeated many times, moving the evaluation date out further each time, ensuring you tackle not just the quick wins, but also long-term improvement. The upshot? You may one day have a real opportunity to sell your business, and you’ll be ready, having already maximized its value. In the meantime, enjoy the many benefits of running an improved, more functional and more profitable version of your business.
Gavin Harrison is co-founder and lead strategist at Compello and the creator of ATLAS™: The Entrepreneur’s Guide to Transformative Strategic Planning. firstname.lastname@example.org